Flourishing In A Post-Colonial World: A Hong Kong Perspective

I remember, and fondly, walking with my mother from the old promenade in Wan Chai westward toward King George V Park. It is a fascinating walk that millions of people have taken, including Takashi Sakai (during the Japanese invasion), Christopher Maltby (in retreat), John Robert Osborn (who would win the Victoria Cross for bravery shown in a nearby building which is now a fancy hotel), Alexander Grantham (who cut ribbons on many of the buildings in this area in the 1950’s), and Charles, Prince of Wales (prior to his speech in 1997, repeating a walk he took on an official visit in 1989 and as a naval officer in the 1970’s). It is a walk that illustrates the enormous progress of this city – and did as early as the 1940’s, when the Japanese came as unwanted visitors and unelected governors.

On this particular walk, I was a teenager and it was the latter part of 1995. As it turned out, this would be my final time in Hong Kong before the summer of 1997, when the British would hand back control of one of the most prosperous pieces of land in human history, an event that served as a philosophical scalpel separating Anglophiles from Sinophiles in Colonial politics. I held a belief then that has survived all my subsequent study of economics, history, law, and other disciplines: That the arrangement by which Britain came to control Hong Kong was brilliant, beneficial, and an important thing from which to learn. And that its study can, possibly, help other countries prosper.

This is why it is devastatingly depressing to me that so little has been learnt from Hong Kong. Whether I am in Nairobi or Kampala or Kigali, I see Hong Kong. The potential is there. Hong Kong, when my grandmother was young, did not look so different from these cities.

Before I discuss Hong Kong, let me point out a flaw in how Hong Kong is customarily discussed by development academics. One outrageous habit of development experts – especially development economists – is to claim that special cases exist and that Hong Kong is one of these special cases. And, nearly always, these “special cases” are the positive cases. It’s not surprising that this pessimistic lens is prevalent: we’ve now spent seven Marshall Plans worth of money in Africa with few results about which to brag. But each success is not sui generis. There is a reason some successes exist.

The correlation that people at USAID, DFID, and elsewhere in the “aid economy” don’t like to talk about is a clear one: There is not a single country that has become a stable, industrialized country since World War II as a result of the kind of aid we provide underdeveloped sub-Saharan African countries. Countries like South Africa, India, and Brazil did not succeed because they had more mosquito nets than nearby countries or because their children were fed Plumpy’nut. Countries like Israel, Singapore, and Taiwan did not develop high technology and serious financial institutions because they had lots of boreholes or projects teaching people to make trinkets for Western markets.

Most of the international aid the United States and United Kingdom provides – and has provided for fifty years – is designed to provide pacification, not progress. Providing basic literacy education is seen as being more important than investing in businesses in the country (though it is demand for workers from these businesses that will drive literacy, not intervention from foreign aid agencies). The UK encourages (and, even more unconscionably, funds) the sprawling bureaucracies in developing countries, from the overpopulated civil service in Kenya to the bloated postal service in Uganda, while spending the latter part of the same breath discussing how essential it is to prune the bureaucratic overgrowth in Europe.

But this structure – the overgrown state employing thousands of low-skill workers – never existed in Hong Kong. It would have, and the British attempted to erect bureaucratic structures of similar size and shape, but this happened to be aborted by the Japanese invasion.

After the war, Hong Kong, built around its key resource – Victoria Harbour – was a machine rebuilt for economic performance. The best defense for Hong Kong was to make itself economically indispensable in the region. If Hong Kong learnt anything from the Christmas of 1941 (the Japanese incursion into the British waters of Hong Kong began on December 7, 1941, a day American readers likely associate instead with the Japanese attack on their Hawaiian naval base, and the battle raged for nearly three weeks), it was that militarization would not save Hong Kong from foreign aggression. Even the Gin Drinker’s Line, which the British had guaranteed would hold the Japanese beyond the limits of Hong Kong for six months or more, collapsed in only sixty hours (Maj. Gen. Christopher Maltby, who had been entrusted with defence of Hong Kong despite being an Army man and having no experience with shoreline or maritime warfare whatsoever, was captured by the Japanese after surrendering on Queen’s Pier – his underestimation of the strategic difficulty of defending Hong Kong was cited in the choice of Grantham and other later Governors and high officials, many of whom had studied Maltby’s failed strategy at Sandhurst).

The part of Hong Kong where my grandmother lived as a child, now one of the most expensive areas on our planet, was, at the time, next to an interlocking series of malaria-infested swamps. These swamps were visible from Devil’s Peak on a clear day (the peak from which Maltby offered a final artillery barrage before retreating). These swamps were not drained by an aid agency. They were drained by local businesspeople who invested in making the areas safer, cleaner, and better for their families and their employees. The quinine packets my grandmother recalled being given in the 1930’s were not provided by the government or by aid agencies, but instead by local businesses, which feared a shortage of literate workers if children missed too much school.

Hong Kong was, in some ways, a neoliberal paradise. It had no laws against child labor. It had no minimum wage (though this changed in 2010). It had extremely low income taxes and, for most of its history, no capital gains taxes. The British guaranteed basic security, but did not “overpolice” the way they had in port cities like Mombasa (this is likely due to not having enough men on hand to actually police much more of Hong Kong beyond the extensive garrison posted to the perimeter of Victoria Harbour). Far from the Harbour, the British (wisely) let informal security arrangements develop, particularly in Kowloon, where people paid local gangs for protection (this practice is, in the minds of many in Hong Kong, how the 14K triad went from being a failing street gang to a vastly powerful criminal organisation and a credible rival to Sun Yee On, though it cannot match Sun Yee On’s 65,000 men). Hong Kong refused to subsidise most business operations, encouraging people to manufacture and provide only things (and services) that were competitive in the global (export) marketplace. The Governors (beginning with Grantham) made enormous investments in human capital, offering intense retraining for workers with obsolete skills and, eventually, small subsidies in the 1980's for factories and workforces to be upgraded in tandem, turning low-technology factories into high-technology factories with highly-skilled workers.

The economic data speak for themselves. There are few stories (Japan and Singapore being the contenders) that can match Hong Kong’s tale of economic progress. And I attribute this progress, at least in part, to the lack of British intervention, the lack of British aid agencies doing the things that British aid agencies do in Africa, the lack of foreign technocrats advocating for needlessly-high taxation, the ability for local businesspeople to make and lose fortunes while striking their own bargains on their own terms, and so on.

Of course, Hong Kong’s story is absolutely unique in one way: The British were not a colonial power in Hong Kong the way they were a colonial power in Africa. In Hong Kong, they were merely renters. Years later, in 2005, I met with friends in Hong Kong to discuss the handover (which handed Hong Kong back to Chinese rule upon the start of July in 1997). I asked what people thought had changed (the consensus among our group was that not much had changed) and I asked what people thought of the British now. One of my friends smiled and said, “The British were never our masters, but I’d say they were good tenants.” Perhaps it is this attitude – cultivated through a view that the British were meddling foreigners, incompetent bodyguards, and overly bureaucratic managers – that protected Hong Kong from adopting the “big state” model of development (under remnants of which so many other former British colonies suffer today).

So, if there is a lesson I learn from Hong Kong, it is that developing countries should be plunged into, and not sheltered from, the competitive and commercial forces that shaped Hong Kong. There was a time when the reply from the aid community was that such a sink-or-swim approach was too harsh. Today, we can see that nothing is more cruel than the predicament well-meaning aid agencies have created. When will we find the courage to reverse course? Undoubtedly at some time after we find the courage to admit we’ve done more harm than good, in many cases, abroad – something no elected official is prepared to say within a thousand miles of a microphone.

Hong Kong’s triumphs are many. A world-class city. Top-quality cuisine of every origin. A tolerant, polyglot society. A nurturing place for top achievers in every discipline, from technology to medicine to architecture. A victory of engineering and urban planning in a location with over one hundred earthquakes per year, some of the most powerful harbor tides on earth, and a monsoon season that can last ten weeks. A well-managed relationship of difficult, nuanced diplomacy with each of its neighbours.

Surely Hong Kong’s success cannot be a mere accident. Surely there are lessons to be learnt from its success.

Is it so difficult to realise, admit, and concede that – just maybe – Hong Kong is a demonstration of what wonderful things are possible in the absence of aid, interventionism, and Occidental paternalism?